Argument Report: When Is the Property Valued in a Divorce Settlement?

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Our reports on the oral arguments of the Illinois Supreme Court's September term continue with Mathis v. MathisMathis presents a question which frequently arises in divorce proceedings: when a significant period passes between the divorce and the property settlement, what is the date on which the property is valued? For the first time in the term, the Court's questioning seemed fairly evenly split between the parties, leaving the result very much up in the air.

Click here for the underlying facts and lower court holdings in Mathis. The husband filed for divorce in 2000, and the judgment of dissolution was entered a few months later. The hearing on the property issues began in April 2004, but years of delays followed. Ultimately, the court set a valuation date of December 31, 2010 - nearly ten years after the judgment of dissolution. On the husband's motion, the trial court certified a question for interlocutory appeal: when there is a lengthy delay between the judgment of dissolution and the hearing on ancillary issues, what is the appropriate property valuation date? The question turns on the meaning of Section 503(f) of the Illinois Marriage and Dissolution of Marriage Act, which provides that the valuation date is "the date of trial" or "as close to the date of trial as practicable."

Counsel for the petitioner pointed out that before the current version of Section 503(f) was adopted, settled law held that the valuation date was the date of the dissolution judgment. She argued that the current version of the statute was both patently and latently ambiguous, and the Court should resolve the issue by construing the statute identically to its predecessor. Justice Thomas noted that the statute speaks only to property issues and not to divorce grounds, and wondered whether that made it more likely that the "date of trial" referred to a trial on ancillary matters. Counsel pointed out that the statute referred to four different sorts of proceedings, involving multiple different trial dates, leaving the statute as a whole ambiguous. Justice Garman asked how the petitioner's proposed rule would work if the value of a business decreased between the dissolution and the property settlement, if the valuation date was the date of the dissolution. Counsel for the petitioner responded that the party owning the business would have to either make up the difference or prove the loss of value was not his or her fault.

Counsel for the respondent echoed Justice Thomas' question, arguing that since Section 503(f) appeared in a section entirely relating to property, the logical interpretation was that the statute's reference to the date of trial meant the property hearing. Justice Theis asked whether, if the Court chose the date of dissolution for the date on which property was valued, that might encourage parties to expedite the property settlement and get on with their lives, in contrast to the long-running dispute in this case. Counsel responded that such a rule can cause unjust results in some cases, and there are tools in the statute for courts to deal with gamesmanship. Justice Karmeier commented that the case seemed to come down to a policy question: whether the Court should take into account what might encourage early resolution of property issues, as opposed to a rule which might encourage certainty. Justice Theis once again noted that there seemed to have been no urgency on anyone's part to resolve the property issues and move on. Counsel responded by describing the discovery and evidentiary disputes which had helped extend the dispute for so many years.

 

Topics:  Divorce, Marital Assets, Valuation

Published In: Civil Procedure Updates, Family Law Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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